The Blog of International Judicial Assistance | By Ted Folkman of Pierce Bainbridge

Case of the Day: Chevron Corp. v. Shefftz

Posted on May 26, 2011

We return to the Lago Agrio case with today’s case of the day, Chevron Corp. v. Shefftz (D. Mass. 2010). In this installment, Chevron sought leave to depose and take other discovery from one of the authors of the expert reports the plaintiffs submitted in the Lago Agrio case, Jonathan S. Shefftz. Chevron was seeking to prove that the Shefftz report relied on the report submitted by Richard Stalin Cabrera Vega, the court-appointed “global damages expert,” which, in Chevron’s view, had been discredited, and that the Shefftz report itself should not be credited.

Judge Tauro found that the statutory requirements for invocation of § 1782 were met, and in particular, that the BIT arbitral tribunal was a “tribunal” for purposes of the statute. All four Intel factors weighed in favor of allowing the discovery. The judge’s description of the third factor—whether Chevron was attempting to circumvent foreign proof-gathering restrictions—was especially clear: the issue isn’t whether the Ecuadorian court would “bless” Chevron’s efforts to obtain the evidence, but whether the discovery was being sought in bad faith.

The judge held that the limitation in Fed. R. Civ. P. 30 on the number of depositions that could be taken without leave of court did not apply to depositions taken in multiple § 1782 proceedings in multiple districts. This is the same conclusion reached in In re Chevron Corp., the case of the day for May 13.

The judge refused to apply the crime-fraud exception to pierce the attorney-client privilege between Shefftz and his lawyer, finding that Chevron had not shown that Shefftz was engaged in or was planning criminal or fraudulent activity. Although Shefftz’s report cited and relied upon Cabrera’s report, the judge took that citation as “an act of transparency that allowed [Chevron] to quickly ascertain [Shefftz’s] reliance upon the Cabrera report and investigate it through discovery.” Nor was there any evidence that Shefftz knew of any alleged fraud in the Cabrera report.

4 Comments

“Chevron was seeking to prove that the Sheffitz report relied on the report submitted by Richard Stalin Cabrera Vega […]”
Shefftz, not Sheffitz.
Also, the third sentence of the Shefftz report states:
“Starting with the Cabrera report’s engineering figures and cost estimates, I have performed my own financial analysis to arrive at an unjust enrichment estimate range of between approximately $4.57 and $9.46 billion, reflecting present values as of 2010.”

Thank you for commenting! I apologize for the misspelling–I’ve corrected it.

I’m curious about the quote from your report. Was there something inaccurate about the post that caused you to include the quote in your comment?

Also, I’m curious about your reaction to the hullabaloo surrounding the Chevron/Ecuador case. Leaving aside the Lago Agrio lawsuit itself, are you aware, in a general sense, of the battles going on in various US courts and in arbitration between Chevron on the one hand and the Lago Agrio plaintiffs and the government of Ecuador on the other, and if so, do you have a reaction that you’d be willing to share?

I included the quote from my report to emphasize the obviously transparent nature of the extent of my reliance on the Cabrera report, as opposed to any claims that Chevron made that a deposition was necessary to determine this (as it was already stated in the third sentence of my report).
I have been following the various course battles in the U.S. regarding the Ecuador case, but as an economist and a legal layperson, I don’t have any expert insight to add.
Be on the lookout thought for an upcoming article in GQ magazine (yes, GQ), by Sean Flynn.